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Evergreen air museum may lose planes, despite claims it is unaffected

Business — After December closure of Evergreen Aviation Airlines, creditors continue to seek payment, some museum planes may be sold


It’s been a little less than a month since Evergreen Aviation Airlines was scheduled to close its operations in McMinnville. The airline did so Dec. 2, but now creditors have continued to surface and a summons was filed Dec. 19 under Chapter 7 of the U.S. bankruptcy code. The summons, if upheld, will require Evergreen to answer the petition. So far, the case includes two hotels seeking more than $440,000 for crew lodging, and $25,000 to a company for snow plowing services in New York. Other creditors may still join the suit.

Del Smith, Evergreen CEO, said he was unaware of the Chapter 7 filing, as reported by The Oregonian.

“I don’t think 7 will work, I think we’ll need 11,” said Smith, referring to the bankruptcy code’s Chapter 11, which would enable the company to be reorganized, not liquidated. “We’ve virtually shut the airline down.”

He said the issues could be settled without a major fight.

“We’re going to perpetuate the company,” Smith said.

Evergreen has 20 days to respond to the summons and can dispute the non-payment allegations.

Among various debts, The Oregonian reported that a California lawyer, Robert Lyon, said there is still money owed on The Spruce Goose. This is counter to a statement released by the museum Dec. 20 stating the plane is free and clear.

“We continue to proudly display The Spruce Goose as our own museum property,” the statement reads. “This was acquired in 1992 under a contract that specified 20 years of annual payments; these have been made. One additional payment is under negotiation and both sides expect a prompt resolution of that payment.”

Smith told The Oregonian that he had no idea that “they felt we still owed them money.”

“I thought we were free and clear on that one,” he said.

The annual payments amounted to $500,000, but Aero Club is still due a percentage of the museum’s earnings, amounting to at least $50,000, as per the sales agreement.

The statement also said the museum is in no danger of losing its displays and has plans to add to its collection in 2014. Although two planes, a 1945 Grumman Avenger and a 1928 Ford Tri-Motor, are listed for sale via Courtesy Aircraft Sales, for $250,000 and $1.75 million respectively.

The museum’s executive director, Larry Wood, said Evergreen Vintage Aircraft owns several of the older planes in the museum’s inventory, which includes fighters and bombers dating to World War II and some replicas of the earliest planes flown, according to a News-Register article. He acknowledged that with the various judgments and liens against Evergreen’s for-profit subsidiaries, some of the planes could be sold or repossessed to satisfy debts.

Wood said he thinks the total is less than 20 percent of the collection.

“If they took them all, and I don’t think they’d all be at risk,” he said.

He added that new owners might choose to donate the planes back to the museum for the tax write-off, instead of taking possession.

“You don’t want to lose an artifact if you can avoid it, but many of the things that are in the museum are on loan from somebody anyway,” Wood said.

For those that aren’t on loan, he said when they have money again they can go back and buy them.

“Or we’ll buy different ones,” he said.

The Oregon Department of Justice investigation, opened in March, continues and is examining the relationship between Evergreen’s for-profit and nonprofit entities, and the transferal of money between them.

Wood said any co-mingling of funds was inadvertent, minor in nature and in the process of being corrected.



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